"However they are serving an important function which is to soak up excess liquidity. can you imagine what tthe true inflation rate would be without crypto"
Aldo,
When people buy crypto the money does not disappear. It just changes hands, in this case by going from the buyer to the seller. Only banks can make it disappear by either contracting credit or in the case of the central banks by selling assets. The amount of money in circulation is left unchanged by the transaction.
